ABB & Hewlett Packard Collaborates For Industrial Solutions

ABB Ltd. (NYSE:ABB) recently teamed up with Hewlett Packard Enterprise Company (NYSE:HPE) to combine the former’s industry-leading digital offerings, ABB Ability, with Hewlett Packard’s innovative hybrid information technology (“IT”) solutions.

The partnership will leverage ABB’s expertise in operations technologies (“OT”) and Hewlett Packard Enterprise’s proficiency in IT to come up with joint industry solutions, which will help turn industrial data into insights and automatic action.

Working in partnership with Hewlett Packard, the company will come up with solutions that produce actionable insights from massive amounts of industrial data, enabling customers to increase the efficiency and flexibility of management of industrial processes across the supply chain. The collaboration will bring intelligence from cloud-based solutions to on-premises deployments in industrial plants as well as data centers for greater speed and yield.

The collaboration will allow the customers to run ABB Ability solutions on hybrid platforms like HPE ProLiant for Microsoft (NASDAQ:MSFT) Azure Stack, enabling themto deploy applications to their preferred location.Besides accelerating data processing in industrial plants, leveraging the right mix of IT platforms will also facilitate efficient control of operations across locations. Further, the partnership is working on delivering joint solutions for data centers, including data center automation and secure edge data center.

Our Take

ABB stands to benefit from investments made in the upgrade of power infrastructure and its focus on reduction of energy intensity across all end-markets. The company is strengthening its position by launching new set of unique solutions as well as software packages to reap the benefits of industrial digitalization. Positive development in the electricity value chain, rapid progress of Internet of Things, Services and People (IoTSP), rapid urbanization along with a surge in energy-efficient transport & infrastructure bode well for the company in the long term.

The company has earned a solid reputation for winning strategic awards and forging important partnerships. Further, broader market conditions represent selective opportunities that can supplement growth momentum going forward. The company has also been successful in clinching major orders across all of its segments that are expected to drive growth. Year to date, the Zacks Rank #3 (Hold) company’s shares have returned 21%, outperforming the industry’s average gain of 15.6%.

However, the fact remains that geopolitical tension globally indicates that the company will continue to suffer from macroeconomic volatility in the short run. Softness in industrial production and the projected slowdown, are weighing on the financials. Moreover, its order level in certain business segments has been hurt in recent times due on weak oil and gas demand.

Stocks to Consider

Some better-ranked stocks from the same space include Deere & Company (NYSE:DE) and Alamo Group, Inc. (NYSE:ALG) . While Deere & Company sports a Zacks Rank #1 (Strong Buy), Alamo Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere & Company has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 19.5%.

Alamo Group has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 6.1%.

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